House prices


PHOTO: STACY SQUIRES/STUFF ANZ says the poor economic signals are pretty much “one way traffic”.

Interest rates could be set for further falls with ANZ bank revising its forecasts and saying it expected the official cash rate to fall to just 0.25 per cent by May.

That meant there was some chance house prices could “take off again”, it said.

The bank said in an update that the outlook for economic growth and inflation were continuing to deteriorate and it now expected the Reserve Bank to make 25-basis-point cuts to the OCR in November, February and May.

The Reserve Bank surprised analysts by lopping a half-percent off the OCR in August, bringing the rate down to 1 per cent.

ANZ counted seven reasons why it thought the RBNZ would put the “pedal to the metal” with further interest rate cuts.